Alveolar epithelial injury is a major factor in the mechanism of Acute Respiratory Distress Syndrome (ARDS). Repair of the epithelial barrier is crucial for restoration of normal lung function but the molecular mechanisms regulating repair are still not well understood. Our objective is to define the mechanisms of alveolar repair involving the progenitor cell property of alveolar type II cells using novel molecular approaches that include genetically-modified mouse models. We believe that results from this research will lead to new treatments that will accelerate the repair program and lessen the chronicity of alveolar epithelial injury and inflammation. The alveolar epithelium is composed of two types of cells: flat type I cells, which comprise 95% of the gas-exchange surface, and cuboidal type II cells which secrete pulmonary surfactant. Injury of alveoli activates programs in type II cells that result in proliferation and trans-differentiation of type II into type I cells leading to alveolar barrier repair. Type II cells thus function as facultative progenitor cells that have a crucial role in repair of the alveoli. As shown in supporting data, we have utilized a mouse model of Pseudomonas aeruginosa (PA) infection-induced lung injury. We discovered that a subfraction of type II cells were activated during alveolar injury to express stem cell antigen-1 (Sca-1) and fork-head transcription factor M1 (FoxM1). This intriguing sub-fraction of type II cell adopted certain aspects of progenitor cell phenotype including higher proliferation rate and in particular the ability to trans-differentiate into type I cells. Using a type II cell specific FoxM1 knock-out mouse model made by us, we found that the mutant type II cells had significantly decreased proliferation and were defective type I cell trans-differentiation. In the proposed studies, we will test the central hypothesis that alveolar injury induces the expression of Sca-1 and FoxM1 in type II cells enabling them to adopt progenitor cell phenotype required for alveolar epithelial barrier repair. We propose the following specific aims to test this hypothesis: 1) We will address the role of induction of type II cell Sca-1+/FoxM1+ sub-populations in acquiring progenitor cell phenotype and mediating alveolar epithelial barrier repair. Our supporting data suggest that Sca-1+/FoxM1+ type II cells that appear in response to PA injury represent the facultative progenitor cell population required for regeneration of alveolar barrier. We will study the function of these cells and determine mechanisms by which they induce type II cells to assume progenitor cell-like state. 2) We will determine the role of FoxM1 expression in type II cells in mediating alveolar epithelial barrier repair. We will define the role of FoxM1 in mediating alveolar epithelial barrier repair with particular emphasis on mechanisms by which FoxM1 directs trans-differentiation of type II into type I cells. We will use the mouse lineage tracing methods to study the fate of wild-type and FoxM1 mutant type II cells post injury. We will also address the question whether activation of regenerative property of type II cells accelerates alveolar repair, and is therefore therapeutically beneficial.